Privatise or pensions will be cut, Royal Mail staff told

[KREBB]

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Philip Webster Almost half a million Royal Mail staff past and present have been warned that their pensions could be halved if the plan to privatise part of the business does not go ahead.

However, one of the leaders of the nearly 140 Labour MPs fiercely opposed to the sale of a stake in the Royal Mail accused the Department for Business of a crude attempt to put the rebels under pressure by releasing a letter from the trustees of the company’s pension fund.

The letter, to Lord Mandelson, the Business Secretary, from Jane Newell, chairman of the trustees, said that without a sale of part of the business, the pension fund deficit would be far greater than the £5.9 billion envisaged in the Hooper report into the Royal Mail’s future.

The report envisaged the deficit being taken over by the Government to make the business more attractive to outside investors. The Dutch firm TNT has long been seen as the most likely firm to take a stake, of up to 30 per cent.

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The pension fund deficit is a long-term drain on the company’s cash and the Royal Mail “is already balance-sheet insolvent”, Ms Newell said. If the recommendations of the Hooper report were not implemented, she said, fully funding the pension scheme was highly unlikely to be affordable by the Royal Mail, with potentially devastating consequences. In a winding-up the pension plan would not even be able to provide as much as 50 per cent of members’ benefits, she said.

There are 452,000 members of the pension plan, 161,000 still working and 291,000 retired or on deferred pensions. The overwhelming majority are on final salary schemes.

While in theory the Government’s Pension Protection Fund would act as a safety net for members, “I would not like to speculate on its ability to absorb the plan without putting an intolerable levy strain on remaining UK pension schemes,” Ms Newell wrote. She called for the Hooper plan to be implemented “for the benefit of all concerned”.

Lord Mandelson endorsed the Hooper recommendations in December, saying that the Royal Mail could not survive in its current form, because of severe financial constraints and falling demand for sending letters, and it needed fresh investment in technology to prosper.

The Business Secretary is due to set out his plans for the Royal Mail on Thursday. The Bill will start in the Lords. Nick Brown, the Labour Chief Whip, has warned Gordon Brown that he is likely to have to rely on the support of Opposition MPs to get it through. Nearly 140 Labour MPs have signed a Commons motion opposing the proposal.

Unions will stage a protest today against the plans, which they say are deeply unpopular. They say the Royal Mail made a profit of £255 million in the last nine months of 2008 and argue that it is healthy and can thrive in its current form.

John Grogan, Labour MP for Selby and one of the leaders of the revolt, said that there was no obvious link between dealing with the pension deficit and part-privatisation. He said the letter from the pension trustees was an obvious attempt to put Labour MPs under pressure. “It lacks the usual subtlety of Lord Mandelson . . . it is not one of his most sophisticated political manoeuvres,” he said.

[BELIAL]

Must think posties are all thick Given average life expectancy of 75 years, pensions have already been halved

[oypostie]

And privatising Royal Mail helps the pension defecit does it ? Must be missing something.

If the pensions defecit is really such a millstone round the companys neck then why are the likes of TNT still prepared to invest their money.
Must be an act of charity !!!!

[Yahoorsur]

What a crock of s**t,a leaked letter on the eve of the bill being brought before the house,this sad little trick has mandys fingerprints all over it,if any mp changes his mind on the issue cos of these dirty tricks,then they aint got a backbone.
as for the trustees,who the f**k is she to say that privatisation is the only way to address the deficet,she looks after the fund ,and is not there to decide the ownership of Royal Mail,democratic control of pensions and pension funds.

[DGP1]

TBH it's nothing more than I expected but that said at least they didn't say that if RM wasn't sold off that the world would end and all the little puppies would die slow and horrible deaths.


Pass the bill or the puppies get it

[Yahoorsur]

lol ,would'nt put it past the Prince of Darkness Mandy

[norbert]

What a crock of s**t,a leaked letter on the eve of the bill being brought before the house,this sad little trick has mandys fingerprints all over it,if any mp changes his mind on the issue cos of these dirty tricks,then they aint got a backbone.
as for the trustees,who the f**k is she to say that privatisation is the only way to address the deficet,she looks after the fund ,and is not there to decide the ownership of Royal Mail,democratic control of pensions and pension funds.

it certainly has the Queen , sorry Prince of Darknesses ( the irony is that he isn't that good at it - more Arthur Daley or Del Boy ) grubby fingers all over it , firstly it was no Saturdays , then it was the possibility of cutting a few weekday one's out , then it was pensions , then the nice cop act , we'll give you concessions boys if you stop being naughty , making trouble , now somebody else to fire the bullets - so f***ing obvious

RMC 's favourite pie connoisseur will be so anguished and torn , maybe more comfort eating again , he always pulled his punches even in the Major years asking everyone to wait for Tony to get in and he can't accuse everyone now of being a bunch of loony trots for wanting disaffiliation